Manufacturers Association of Nigeria Export Promotion Group (MANEG) has disclosed that the Federal Government is owing Nigerian exporters an estimated N527 billion of Export Expansion Grant (EEG).
Chairman, MANEG, Chief Ede Dafinone, who made this known in a webinar in Lagos, said the non-payment of all the EEG to Nigerian manufacturers could be a bad signal to the country’s manufacturing export segment, with grave consequences on the national non-oil export revenue target.
According to him, the debt was beginning to brew uncertainty and instability in the country’s manufacturing export sector, which is affecting the country’s non-oil export revenue target of N5 trillion for 2020. The MANEG boss also gave a breakdown on the EEG payment, saying the total amount of the backlog yet to be paid by the Federal Government by promissory notes are in two parts, where N197 billion has been approved by the National Assembly for participation in the promissory note programme, and another N130 billion that is yet to be approved by the lawmakers.
“We are pursuing that with NASS to get that approval. Outside of that, there is a backlog being created for the period of 2017, of which I said only 17 per cent has been paid, where 2018 and 2019 are fully outstanding. The current backlog going by estimates will be approximately N150 to N200 billion, which is again bad because they are creating a fresh backlog, and this would bring another batch of promissory notes to be issued in order for exporters to be paid.”
He also disclosed that sometime in 2019, “the Nigerian Export Promotion Council (NEPC), issued export credit certificates to exporters for the 2017 EEG, but at the time, only 17 per cent of the amount that has been approved was paid using those export credit certificates. The balance of 83 per cent is yet to be paid, and we are engaging the NEPC and the Federal Ministry of Industry, Trade and Investment on their plans to pay the 2017, plus the 2018 and 2019 that are also outstanding,” he stated.
According to him, over the last one year as a result of the border closure, two of its members have had to close shop because they had only cross-border export as their sole business, while the rest of MANEG are exporting a percentage of their products.
He pointed out that the non-payment of EEG is greatly affecting non-oil export, saying that with the crash in oil price in March, MANEG had highlighted the need for the government to diversify their revenues from oil towards non-oil.
“With the stoppage of EEG, there was a complete drop in the amount of non-oil export over that period. It is very clear that with EEG, non-oil export grew significantly. What we found is that exporters who are beneficiaries of the grant have priced their products to break into the new market at a lower price that they can afford to sell normally, so as to take a stake in the market in foreign countries.
A situation where the EEG has not been paid, the exporters find it unprofitable to break into those markets and retreat towards our own local market, which clearly is not good for the Nigerian market,” he lamented.
He said the manufacturing export sector witnessed a decline in exports as a result of the border closure, which harshly impacted on its output.
